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Franchising: The Risks and Rewards

26 July 2012

For any new business, there are always risks and rewards to be considered. The conventional structure of franchising, however, brings a unique set of prospects for franchisees. Being aware of and striking the right balance between these challenges and reassurances is key to establishing a strong vision for your business.

The rewards of owning your own franchise

The biggest benefit of franchising is the minimisation of risk when compared to independent businesses. By buying into a business that comes as a proven concept – including a business plan and various management, training and marketing support systems – the pressure to produce these elements is alleviated. This helps new franchisees overcome any lack of business experience. If you feel some franchise training could benefit you, be sure to visit the ACCC stand at the expo to discuss their free franchising course.

Franchise investments can also be thoroughly researched before spending a cent. Available to you is a wealth of information, statistics and people with prior experience directly related to your venture, unlike independent businesses that come untested. Franchise Success Panels at the expo will enable you to get honest and insightful answers from existing franchisees.

Other fantastic rewards include the ability to capitalise on the franchising format to build mass purchasing power, brand identification and customer loyalty. Furthermore, regional or national marketing campaigns managed by the franchisor bring far-reaching rewards.

Financing may also be made easier, as banks are sometimes more likely to lend to a known reputable franchise. When you arrive at the 2012 Franchising & Business Opportunities Expo, head straight to the Franchising Advice Centre, where you can book free consultations for advice from specialist bankers and lawyers.

Potential risks to be aware of

Many first-time franchisees leap in under the assumption that franchising automatically means success. However, make sure you fully understand the conditions of the franchise in order to pick one that’s suited to you. It’s essential to do your research before making any big decisions, which is made easy at the 2012 Franchising & Business Opportunities Expo.

The costs involved in running a franchise need to be considered before you decide to purchase. On top of set costs, other restrictions such as fixed suppliers, hours of operation, uniforms and training methods may apply. If you are new to managing employees, the Fair Work Ombudsman is a great resource and will have a stand at the Expo.

Finally, if the time comes to sell, make sure you understand any restrictions imposed by the franchisor. By personally talking to the many franchisors exhibiting at the Expo, you can not only ask questions, you can also get a feel for the brand and its reputation in the marketplace.

To help you navigate the risks and rewards relating your franchising venture, the process recommended in the Franchising Code of Conduct will always guide you in the right direction. You can pick up your copy at the Expo. Register for your free tickets and we’ll see you there!